LIGENT is currently in the middle of its public offering, but the timing appears challenging as optical module stocks have been underperforming recently. Let's break down the key details of this IPO.
The offering price is set at HK$32.96 per share, with each lot comprising 100 shares, putting the minimum subscription cost at HK$3,329.24. The company's market capitalization stands at approximately HK$32.398 billion. The subscription period runs from September 14 to September 17, with shares slated for listing on September 22.
A total of 172.0147 million shares are being offered, representing roughly 17.50% of the post-IPO share capital. The public tranche accounts for an initial 10% of the offering, with the public market raising approximately HK$566.96 million. The tail-end public subscription tier requires HK$3,329,240.15 for 100,000 shares, while the head-tier institutional subscription demands HK$6,658,480.32 for 200,000 shares.
Citigroup and CITIC Securities serve as joint sponsors, with a greenshoe option in place managed by CLSA. Cornerstone investors include Primavera, GBAHIL, CFTC Paragon (managed by SMIC Fund), HK BVF I, PAG, GF, E Fund, GigaDevice, Goke Hong Kong, and others, collectively subscribing to approximately HK$2.6658 billion, representing 47.02% of the offering.
LIGENT primarily manufactures optical modules, optical chips, and optical network terminals, positioning itself as a genuine supplier to AI data center expansion rather than just a concept stock. According to the prospectus's industry classification, the company ranked fifth globally among professional optical module manufacturers in 2025 with a 4.0% market share, not third globally. However, it does rank third by revenue within the Chinese market. As of the first half of 2026, data communications optical modules accounted for 69.4% of revenue, with 1.6T modules already in mass production.
Where to begin my assessment: The public offering consists of 170,000 lots, representing a substantial supply that makes allocation relatively easy but also implies considerable selling pressure after listing. Based on post-IPO total share count, the static P/E ratio for 2025 stands at approximately 31.6 times. For comparison, Zhongji Innolight trades at roughly 101.0 times static P/E, while Eoptolink sits at around 61.9 times. By A-share standards, LIGENT's valuation wouldn't seem excessive.
However, listing in Hong Kong with a HK$32.8 billion market cap feels somewhat expensive given the current optical module landscape. The simplest analysis: if the valuation were genuinely attractive, why are cornerstone investors predominantly domestic institutions? The company appears solid, but if international institutional investors saw clear value, they would have participated unless they're waiting for lower prices.
My personal stance: I'll likely participate to some degree, deciding closer to the deadline. This type of offering falls into the category where you grit your teeth and subscribe modestly, anticipating either a slight gain or price stabilization at listing. There's also a reasonable chance of breaking below the offer price in dark pool trading. Conservative investors might reasonably choose to sit this one out.
As a side note, several brokerages currently offer favorable terms, including zero-commission trading and zero-fee IPO subscriptions. Feel free to reach out if you're interested in exploring those options.
*Special disclaimer: (1) HK and US IPO subscriptions are not guaranteed profitable; any break below the offer price on debut will result in losses. Please set appropriate expectations. (2) All investments carry risk; participate cautiously. This article reflects personal investment analysis and thinking only, not investment advice. Any actions taken based on this content are at your own risk.